Declaring that he intends to turn Cisco Systems (CSCO) into the world's top technology company, CEO John Chambers expressed optimism Friday that the San Jose company can boost its annual revenue by 5 to 7 percent -- and double its software sales -- over the next few years.

Chambers -- who first forecast that rate of growth a few months ago -- repeated it during a conference with Wall Street analysts, adding that the expansion will mostly be generated from within the San Jose corporation, but also by buying other businesses.

Although Cisco primarily is known for its routers, switches and other hardware that move data across computer networks, it's already pushing hard into software. Nine of its last 10 acquisitions have been software companies and most of its 26,000 engineers are software specialists, said company spokesman John Earnhardt.

"Our secret sauce, if you will, is the software that runs the hardware that we also design," Earnhardt said. He noted that software accounts for about $6 billion of the company's annual revenue, which totaled $46 billion in its most recent fiscal year.

Chambers said Cisco also hopes to make more money by providing consulting and other services to its customers. In addition, it is expected Monday to announce plans to profit from the growing numbers of household, industrial, medical and other gadgets that are being connected to the Internet.

Advertisement

In a note to his clients following the conference, International Strategy & Investment Group analyst Brian Marshall said Cisco's goal to increase its annual revenue by up to 7 percent is reasonable. But he said it depends on how quickly the global economy snaps out of its slumber. Moreover, he cautioned that Cisco currently gets about half its revenue from routers and switches, so refocusing on such things as software and services "will take many years."

After Chamber's comments, Cisco's shares fell 14 cents -- less than 1 percent -- to $19.33 at the market's official close of trading.

Contact Steve Johnson at 408-920-5043. Follow him at Twitter.com/steveatmercnews.